[isatrader]

So the gold miners picking up was not my imagination.

They've been off my radar for a while too, as Gold has been in Stage 4 for 3+ years now, and topped in 2011. So the fact that some of the gold miners are turning around, or just forming massive bases and not falling anymore is interesting. Something to keep an eye on at least, as stocks with big bases is what I'll be looking for when the market Stage 4 comes to an end, and you won't find those in any sectors only just breaking down into Stage 4 now, as I mean 1+ year bases. So they'll be in the most unloved sectors of the last few years where all the weak hands have already left, and so will sell off a lot less during a broad market decline and form their Stage 1 bases. 2016 is going to be an interesting year.

[shaunattwood]

re gold, XAU still trending down long term below steeply declining 150 day ma, advise caution like with oil producers false bottom last year

[isatrader]

re gold, XAU still trending down long term below steeply declining 150 day ma, advise caution like with oil producers false bottom last year

Agree. Not suggesting anyone buys as gold is still in Stage 4. Am just highlighting an area to watch showing relative strength versus the market and forming big bases.

[pcabc]

re gold, XAU still trending down long term below steeply declining 150 day ma, advise caution like with oil producers false bottom last year

Agree. Not suggesting anyone buys as gold is still in Stage 4. Am just highlighting an area to watch showing relative strength versus the market and forming big bases.

Here is my own calculated breadth chart for gold plotted against market breadth for gold miners. Health warning, calculated by a small and fairly arbitrary pool of miners.
   

Please ignore the noise spikes on the gold price graph.

[pcabc]

re gold, XAU still trending down long term below steeply declining 150 day ma, advise caution like with oil producers false bottom last year

Agree. Not suggesting anyone buys as gold is still in Stage 4. Am just highlighting an area to watch showing relative strength versus the market and forming big bases.

Here is my own calculated breadth chart for gold plotted against market breadth for gold miners. Health warning, calculated by a small and fairly arbitrary pool of miners.


Please ignore the noise spikes on the gold price graph.

I think it is quite interesting what is going on. The general theme in stage analysis is listen to the chart rather than anything else, and also 'Forest to the trees', should we be looking at going long on gold miner stocks with the current market tipping into stage 4?

However, it seems perfectly sensible (a value consideration) that gold miners are inextricably linked to the gold price, which might be on the end of stage 4 or in 1A. So the question is, is the link to gold price more important than the status of the wider equity market?

The other question is, if the gold price is not in stage 2 why are some gold miners on the cusp of breaking out. Looking at PHAU.L it looks like gold might be turning the corner. Are some of the the gold bugs jumping onto gold miner shares in anticipation? Presumably if the gold price does not do as expected then this won't go well?

[isatrader]

I think it is quite interesting what is going on. The general theme in stage analysis is listen to the chart rather than anything else, and also 'Forest to the trees', should we be looking at going long on gold miner stocks with the current market tipping into stage 4?

However, it seems perfectly sensible (a value consideration) that gold miners are inextricably linked to the gold price, which might be on the end of stage 4 or in 1A. So the question is, is the link to gold price more important than the status of the wider equity market?

The other question is, if the gold price is not in stage 2 why are some gold miners on the cusp of breaking out. Looking at PHAU.L it looks like gold might be turning the corner. Are some of the the gold bugs jumping onto gold miner shares in anticipation? Presumably if the gold price does not do as expected then this won't go well?

I'll start with one of my favourite charts for determing when to be in gold compared to stocks - which is the 20 year monthly relative performance chart of gold versus the S&P 500. Basically it's good to be long gold when it's above the rising 30 month MA and vice versa. Currently it shows as monthly Stage 4B, but close to the still declining MA. Hence it would still take some fairly strong moves to turn the MA up, but it is showing small signs of flattening a little, and relative price is the closest it's been since the gold bear began.

   

Gold mining stocks imo are linked mainly to the gold price, but they would also be influenced by the general market moves if there is liquidation type selling in the market i.e. where there is panic selling in the broad market and people have to raise cash from whatever assets they can to meet margin calls etc. So we saw a good example of this in 2008 when gold sold off with the market for much of 2008, but then bottom a full 5 months earlier than the broad market and was giving Stage 2 candidates in late 2008, while the broad market was still in a deep Stage 4 decline and yet to find a bottom. So imo commodity stocks follow their respective commodities primarily, but are influenced also to a lesser extent by the broad market.

Gold is also affected by the currency that it purchased in and so it's chart looks different depending on what currency it is bought in. For example go on https://www.bullionvault.com/ and you can buy and sell physical gold in multiple currencies such as Dollars, Pounds, Euros & Yen in the same account.

So although it's in Stage 4 in US Dollars, in Euros, it bottomed in December 2013, and broke out into Stage 2A at the start of 2015 after forming a one year Stage 1 base, and is now attempting to make a secondary base at the upper end of that Stage 1 base, after pulling back for the majority of 2015. So in Euros I'd give it a Stage 4B- rating currently personally, however it's just above it's failed Stage 2A breakout level and if it gets back above it's October 2015 swing high then it would be back into Stage 2 again. So although messy, it could be close to completing a very large two year base in Euros only. We will see.

In Pounds it's in Stage 1 once more, and Yen it's in Stage 4, but again above it's 2013 low, after a failed Stage 2A breakout attempt in early 2015.

   

And one more currency to add to this discussion is the Chinese Yuan which could be further devalued against the dollar by Chinese policy makers and hence cause a sharp rise in chinese buying, which has already had a strong move in gold since the start of the year. See http://www.zerohedge.com/news/2016-01-10...na-edition

   

So with the broad market Stage 4 only just heating up and very little panic selling yet, all stock classes including gold miners could be in for hit from liquidation trades if the Stage 4 gets ugly. But I think we should keep an eye on gold and the gold stocks as their charts are showing good relative strength versus the market and golds relative performance in US dollars is making it's own Stage 1 base and is back above it's zero line for the second time in the last 4 months and so there's a chance that there could be some early leaders if gold continues to pick up.

[isatrader]

Another fairly strong day for P&F double bottom breakdowns again. So here's a few of them for the short watchlist - DWRE, BITA, LYV, DXCM, LCI, HAR, DATA, ACHC

                               

[isatrader]

Yet another large day of breakdowns in the S&P 1500 with 55 breakdowns and only 5 breakouts. So here's a few for the short watchlist - SEM, MHK, UNH, THO, BIG, UTHR, BWLD